The 1938 Isle of Man Tourist Trophy saw the Senior TT lap record of 90.27 mph set by Freddie Frith the previous year broken in 1938 when Harold Daniell completed a lap at 91.00 mph on his Norton, a record which would stand for 12 years. He managed to win, beating Stanley Woods by only 14.4 seconds. Stanley Woods won the Junior, with Harold Daniell coming fifth, while Ewald Kluge on a DKW won the Lightweight. Kluge was the second Lightweight TT winning non-British rider in a row, Omobono Tenni having won the previous year.
Between 1931 and 1937 Norton had six Senior-TT wins with the long-stroke CamShaft One (CS1) engine. Norton entered the 1938 Senior TT with a new short-stroke engine, new telescopic front forks, and won for the 7th time, with rider Harold Daniell.